Demand for Kindle Fire and e-readers waning

The demand for Amazon's line of tablets and e-readers has taken a dip

Amazon may have started the (Kindle) Fire, but it seems to have a tough time stoking the flames as time goes with one analyst predicting demand for Kindle e-readers is on the decline.

In addition to waning interest in e-readers, overall demand for the the Kindle Fire tablet - which launched toward the end of last year - has dipped as well. However, it's projected that the touchscreen color model will still be more popular than Amazon's traditional e-ink models.

Kindling for the Fire

A recent intent-to-purchase survey from Pacific Crest analyst Chad Bartley gives a bit more insight into the fate of Amazon's Kindle line. According to the findings, fewer people were planning to buy a Kindle Fire -- and even fewer had interest in the company's black-and-white e-ink models.

What's more, a Q1 survey from the brokerage firm predicted 4.9 percent of respondents were planning to buy a Kindle Fire.

But during the second quarter of this year, that number mysteriously dropped to only 4.5 percent -10 percent month-over-month decline. These figures also line up with the analyst's supply checks, which declined even further to 15 percent in March.

Amazon at risk

While e-tailer Amazon may have less to fear from waning interest in the more popular Kindle Fire - which at $199 is a cheaper alternative to Apple's more expensive iPad - the company's more traditional e-readers Kindle and Kindle Touch are taking the brunt of the bad news.

This year's sales forecasts of 24 million units have been slashed to a mere 12.3 million.

"We attribute weakening demand to the large install base of Kindle e-readers -- over 28 million -- and maturing of the category after initial adoption by avid readers. We also believe ebooks are being read on a broader array of devices," Bartley explains.

That's likely to add some risk for Amazon, although the company's stock price was up $2.90 (1.54 percent) to $190.87 in the wake of Friday's bleak news.